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A Look At Fulcrum Therapeutics' (NASDAQ:FULC) Share Price Returns

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Fulcrum Therapeutics, Inc. (NASDAQ:FULC) share price slid 26% over twelve months. That contrasts poorly with the market return of 54%. We wouldn't rush to judgement on Fulcrum Therapeutics because we don't have a long term history to look at. It's down 5.8% in the last seven days.

Check out our latest analysis for Fulcrum Therapeutics

Because Fulcrum Therapeutics made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Fulcrum Therapeutics grew its revenue by 1,615% over the last year. That's well above most other pre-profit companies. Given the revenue growth, the share price drop of 26% seems quite harsh. Our sympathies to shareholders who are now underwater. Prima facie, revenue growth like that should be a good thing, so it's worth checking whether losses have stabilized. Our monkey brains haven't evolved to think exponentially, so humans do tend to underestimate companies that have exponential growth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

If you are thinking of buying or selling Fulcrum Therapeutics stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While Fulcrum Therapeutics shareholders are down 26% for the year, the market itself is up 54%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 7.4% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for Fulcrum Therapeutics you should be aware of, and 1 of them is a bit concerning.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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